NOUSHAD ALLAKKAT Versus THE STATE TAX OFFICER (WC), STATE GST DEPARTMENT, MANJERI, THE ASST. TAX OFFICER, SQUAD NO. VII, STATE GST DEPARTMENT, PALAKKAD, STATE TAX OFFICER, SQUAD NO. VII, STATE GST DEPARTMENT, PALAKKAD, STATE OF KERALA, REPRESENTED BY ITS SECRETARY, TAXES DEPARTMENT, THIRUVANANTHAPURAM AND THE MANAGER, MALAPPURAM
GST
2018 (12) TMI 66 – KERALA HIGH COURT – [2019] 61 G S.T.R. 297 (Ker), 2019 (21) G. S. T. L. 314 (Ker.)
KERALA HIGH COURT – HC
Dated:- 8-11-2018
WA. No. 2070 of 2018
GST
MR K. VINOD CHANDRAN AND MR ASHOK MENON, JJ.
For The Appellant : ADVS. SRI. HARISANKAR V. MENON AND SMT. MEERA V. MENON
For The Respondent : SRI MOHAMMED RAFIQ SR GP
JUDGMENT
Vinod Chandran, J.
The appellant, who obtained provisional release of the goods by furnishing bank guarantee for the applicable tax and penalty as spoken of under Section 129 of the Integrated Goods and Services Tax Act, 2017 (for short “IGST Act”), as also bond for production of the goods an
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tion 129(4) and an order was passed under Section 129(3). During the proceedings, the appellant had furnished bank guarantee for applicable tax and penalty under Section 129 and also furnished bond for production of goods and security equivalent to the value of the goods under Rule 142. Before the order was passed under Section 129(3), according to the appellant, there was no direction to produce the goods. However, when the final order was issued, it contained two grounds for demanding tax applicable and imposing penalty. One of the grounds was violation as indicated herein above of the collection of CGST and SGST, when actually IGST should have been collected. The other ground alleged was that the goods were not produced under Section 140. The order was challenged before this Court in a Writ Petition, in which the learned Single Judge found that there was no reason to invoke the extra-ordinary jurisdiction under Article 226, especially when there was an appellate remedy available.
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ision Bench found that under Rule 140(2), there is a provision for release of goods on a provisional basis, but only on execution of a bond in the Form GST INS 04 and furnishing of security in the form of a bank guarantee equivalent to the amount of applicable tax and penalty payable. The Division Bench after considering the provision requiring production of goods on a demand made; also directed expeditious finalization of adjudication proceedings, since the dealer would not be entitled to deal with the goods till adjudication is over. We reiterate for emphasis that it was a case in which there was a discrepancy noticed with respect to the documents accompanied and the actual goods in transport. We also would observe that there was no declaration in the said judgment that there is an imperative mandate to produce the goods when there is an order passed under sub-section (3) of Section 129.
6. We also have to notice yet another bench decision of this Court in W.A.No.509/2018 (Asst.STO
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e tax, interest and penalty levied. The Bank Guarantee is also furnished in accordance with the orders of this Court. There can be no situation of failure to pay the amount of tax and penalty, after final adjudication, since already there is a Bank Guarantee furnished as mandated under Section 140 of the Act. In such circumstances, we are of the opinion that release of the goods can be made on the petitioner furnishing a Bank Guarantee for the entire tax and penalty and also executing a bond as provided in Form GST INS 04 but however without any liability to produce the goods, which can be dealt with by the petitioner. The interim order is modified to the above extent.”
7. We notice from Section 129 that the confiscation proceedings under Section 130 would be possible only if the dealer fails to pay the applicable tax and penalty imposed by an order under Section 129(3). Confiscation is hence a coercive measure to ensure payment of the tax and penalty levied on a delinquent dealer; w
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tee could be enforced.
8. The Senior Government Pleader would contend that the penalty was not imposed on the ground that the goods were not produced. The adjudicating officer merely pointed out the fact that despite an order the goods were not produced. In any event, there is a security furnished by the dealer equivalent to the value of the goods which could be invoked in lieu of the confiscation proceedings.
9. We were also invited to look into Ext.P7 order by the learned Senior Government Pleader and his submission is that there is only a statement that the dealer had not produced the goods on a demand made and that is not a ground for which there is a penalty imposed. In any event, we hold that it cannot be a ground for imposition of a penalty and the other grounds as found in the order for imposition of penalty could be challenged before the statutory authority. Hence, we only observe that the production of goods under Rule 140 is only for invocation of confiscation proceedings,
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